Companies that r not small businesses r getting Millions In SB Loans

[BUtterfield 8 41,818]

A federal crisis fund of $350 billion established to keep small businesses afloat during the coronavirus pandemic ran out this week, leaving thousands of companies waiting desperately for help.

But several giant companies with hundreds of stores, thousands of employees, and whose executives make millions announced they'd received the maximum possible payouts under the small business program.

"Unfortunately, they were in line as soon as the window opened for this program and took a lot of resources away from those small business owners where this was their only option," Holly Wade, director of research with the National Federation of Independent Business (NFIB) lobby group, told BuzzFeed News.

Sandwich maker Potbelly and Ruth's Chris Steak House successfully obtained loans worth $10 million and $20 million, respectively, according to filings this week with the Securities and Exchange Commission (SEC). Taco Cabana, which has at least 164 stores across the country and is owned by parent company Fiesta Restaurant Group, also received a $10 million loan.

All loans were from JP Morgan bank but will be backed by the US government as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security Act, or CARES Act. The act provided up to $350 billion in loans to businesses with 500 employees or less for payroll purposes.

But the law provided some flexibility to restaurant and hotel groups by stating they could apply as long as they had no more than 500 workers at a single location.

Under the Paycheck Protection Program (PPP), the government will forgive the loans if the money is used on payroll, rent, or utilities — and workers aren't laid off.

Potbelly, Ruth's, and Fiesta Restaurant Group are publicly traded companies so their SEC filings were made public, but private companies do not have to disclose any loans.

Potbelly's chief people officer, Matt Revord, told BuzzFeed News in a statement, "Every penny will be used to financially support the employees in our shops. Congress specifically qualified restaurants for the PPP loan program because restaurant workers are vital to our economy.”

In the very same SEC filing that revealed its PPP loan, Potbelly announced it had promoted Steven W. Cirulis to the roles of chief financial officer and chief strategy officer, paying him a $425,000 yearly salary, which has been temporarily reduced by 25% due to the pandemic. Just for signing on, Cirulis was awarded a $100,000 bonus and will be eligible for a year-end bonus worth up to 60% of his base salary.

In 2018, Potbelly CEO Alan Johnson received more than $1.6 million in salary and bonuses. The company owns more than 400 stores in the US.

https://www.buzzfeednews.com/article/davidmack/coronavirus-small-business-loans-big-companies-potbelly?utm_source=dynamic&utm_campaign=bffbbuzzfeednews&ref=bffbbuzzfeednews

[ADVENTURE 856]

While I don’t agree with where the money is going, I’m also not sure the companies are the ones at fault. Seems like the laws were written poorly and destined to fail. These large companies have a responsibility to their investors and workers to do what they can to stay afloat. If they didn’t try to do as much as they could, then they would face consequences. 

its a great idea for executives to take pay cuts though. Unfortunately most aren’t that kind. 

[SMILE2NE1 3,566]

Hopefully these funds go to workers who otherwise would have no income

[Economy 52,858]

1 hour ago, ADVENTURE said:

While I don’t agree with where the money is going, I’m also not sure the companies are the ones at fault. Seems like the laws were written poorly and destined to fail. These large companies have a responsibility to their investors and workers to do what they can to stay afloat. If they didn’t try to do as much as they could, then they would face consequences. 

its a great idea for executives to take pay cuts though. Unfortunately most aren’t that kind. 

Yeah I think executive pay cuts is the right thing to do in times like this such as Tesla did

 

But honestly executive pay is usually not as big a portion of companies expenses and some people imagine for most Corporations It's not by cutting their wages in half or even more that u save a company in times like this. 

 

Thing is, the size of a company alone does not always tell you how well or profitable they are. People tend to associate large Corporations in their minds with top performers such as Amazon or Apple but being large does not always mean ur necessarily on a good boat. So I don't think this common attitude that if a company is large they should never get help is necessarily a healthy mindset.

 

What ideally they should have done is a program that's more seperate for big and small businesses since some aspects of how they function is different so that all of them can get the help they need without interfearing with eachother cuz after all small businesses do have the tendency to be more vulnerable (even tho it does vary from company to company)

 

And of course, conditions and restrictions too. U don't want companies that don't actually need it apply for it. Here in Canada companies have to show a drop in revenue since Covid-19 of a certain threshold for example to qualify for the wage subsity and they can't lay off workers for other help that comes with it

[ADVENTURE 856]

3 hours ago, SMILE2NE1 said:

Hopefully these funds go to workers who otherwise would have no income

Paying workers is really the main objective. My parents own a small business and they have to show that they have not laid off employees, will continue to pay them, and I believe they have to show this for like 2 years or then they have to pay the money back. And that goes for these companies too. So yes, the money is for employees